Burj Khalifa service charges 'lower than expected'

Real estate experts react to tallest tower fees announced by Emaar Properties.

While service charges at Burj Khalifa will start at AED52.77 ($14.36) per sq ft for residential units and will rise to AED78.63 ($21.40) per sq ft for Armani Residences, real estate experts told Arabian Business that they were not as high as anticipated.

Emaar Properties’ Burj Khalifa Call Centre confirmed that the AED52.77 ($14.36) per square foot service (sqft) charge was made up of three elements: a community service fee of AED42.48 ($11.56) per sqft, a chilled water charge of AED9.29 ($2.52) per sqft and a cold and hot water charge of AED1 ($0.27) per sqft.

Commercial unit service charges start from AED55.70 ($15.16) per sqft, while corporate suites incur charges of AED71.99 ($19.59). Residents are required to pay the charges in three installments, the first cheque immediately, the second on July 1 and the final one on October 1.

Confirmation of the charges was welcomed by those in the real estate sector, but were greeted with mixed reactions.

“The announcement on exact figures is positive news for the residential market. We had heard the service charges would be high AED80 to AED130 per square foot, which was causing existing investors to re-evaluate their purchases, especially as Emaar were asking for the final ten percent installment plus service charges, in advance,” said Adam Farani, a residential sales consultant at the Better Homes agency.

He added that while the charges were “higher than others on the market, it is below what our clients had anticipated. Owners can now restructure their sale and rental property rates for current and future clients.”

Charges for the Armani Residences are higher again and rise to AED78.63 ($21.40) per sqft, which includes a community maintenance charge of AED39.35 ($10.71) per sqft, a chilled water charge of AED9.28 ($2.52) per sqft, a hot and water charge of AED1 ($0.27) per sqft and a special ‘Armani Hospitality Fee’ of AED29 ($7.89) per sqft.

Saud Masud, head of research and senior real estate analyst at UBS in Dubai, said he was not surprised that the charges for the Armani Residences were higher. “One may argue Armani service fees are at the high end of the range but it is also the ultra luxury segment with a unique target end user,” said Masud.

Ian Albert, regional director of real estate consultants Colliers International, said the market average in Dubai for residential units was AED8 to AED15 per square feet per annum, but that comparing the rates in Burj Khalifa to “a standard 35 storey tower elsewhere in Dubai is similar to comparing the servicing costs of a Rolls Royce to a Toyota.”

The rates are less than those at Emirates Towers, said Porush Jhunjhunwala, head of commercial sales and leasing at Better Homes, who believes the announcement will “attract more end-users, including those who were initially discouraged by the higher figure speculated in earlier weeks.”

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Posted by: His Excellency Dr Paul

You know summer is here when every swimming pool cooler in the Greens get switched off to save..., er... I mean breaks down for about 3 months until an audit, several meetings and full report can be commissioned and parts shipped in from the other side of the world. If Emaar are the best, I pity the poor guys living in Nakheel projects.

Posted by: Mohd Afzal

Dear Anonymous, Miss Dubai is partly correct. There is a Greens Homeowners Committee and my neighbor is one of the members. Emaar does show the accounts and does have it audited each year by BDO Patel & Saleh and Grant Thornton I think. The owners do have a say in who manages their services in their community. Miss Green is wrong to say there is an Association, becuase there is none and its not really Emarr's fault but because until very recently RERA did not release the regulations to enable them to form the Association. I have purchased in other communities but I can truth fully say that Emarr with all their faults is still by far the best developer and community manager.

Posted by: MissDubai

Perhaps your friends should get in touch with the Greens Homeowners Association. They are very much engaged in the processes of auditing service fee balance sheets and selecting contractors for their community.

Posted by: Anonymous

"Where a home owner association is formed"....are you saying there are Emaar communities where the home owner association has NOT been formed??? If so, what is your answer to why this has happened. By the way, I have friends who are owners of the Greens and they had no say whatsoever when Emaar increased their Service Charge fees. They have received no audited balance sheets, nothing audited provided as to where the money goes so I don't know what planet you are living on but here in Realityville, aka Dubai, home owner associations, open accounting, open bidding, etc. is not happening, and it is NOT happening in Emaar projects either! You do your research!!

Posted by: MissDubai

You've just described exactly what happens in current Emaar communities where a homeowners association has been formed. Do your research.

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